Ryan Selkis: Building Accountability in Crypto

Ryan Selkis is the founder of Messari, an open data library and curation tool that helps researchers, investors, and regulators make sense of the crypto industry. In this conversation, Selkis and Anthony Pompliano discuss macro-crypto trends, the importance of data transparency and disclosures, and how to go viral on Twitter.

• 0:02Speaker 00

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:15Speaker 00

  Ryan Selkis is the founder of Messari, an open data library and curation tool that helps researchers, investors, and regulators make sense of the crypto industry. We cover a lot in this conversation, including macro crypto trends, the importance of data transparency and disclosures, and how to go viral on Twitter. I really enjoyed the conversation, and I hope you find it as entertaining and informative as I did. This podcast is presented by Blockworks Group, the only blockchain event and media production company I trust. If you're an investor, lawyer, accountant, or entrepreneur, and want to attend exclusive events and dinners, visit them at blockworksgroup.io. I promise you won't be disappointed.

• 0:55Speaker 00

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:22Speaker 00

  Before we get into this episode, I want to give a quick shout out to one of our sponsors. Soluna is a blockchain computing company powered by its own renewable energy. The team is planning to build a 900-megawatt facility on top of a 37,000-acre location, one of the best wind sites in the world in southern Morocco. You'll hear more from them later in this episode, but I'd love if you could go check out their website. You can find them at soluna.io. Alright guys, I've got Ryan here. We've got a whole bunch of stuff to talk about. We're gonna go real fast and furious, I think is how you say it, to get through it all. Thank you so much for coming.

• 1:55Speaker 01

  Thank you for having me. This is long overdue.

• 1:57Speaker 00

  It is. We had it scheduled one time, and then you had like this really important event happen. You can get into that later if you want.

• 2:05Speaker 01

  Which one?

• 2:06Speaker 00

  Your second baby.

• 2:07Speaker 01

  Oh, yeah.

• 2:08Speaker 00

  That was pretty important.

• 2:09Speaker 01

  Yeah, that, yeah, that I'd say that was a milestone. All right, all right. So a lot, lot, a lot of babies, the, the company's a baby, two year old's a baby.

• 2:17Speaker 00

  That's all fair.

• 2:18Speaker 01

  Baby's a baby.

• 2:20Speaker 00

  Background real quick for those that don't know.

• 2:22Speaker 01

  Sure. So I started my career in venture capital, got into Bitcoin in 2013 and really just started as an independent analyst accidentally because when I bought Bitcoin, I'd been following it for a couple of years, but when I bought it in mid to late 2013, it was right after Fred Wilson and the Winklevoss twins had kind of come out. So, you know, became clear that this was not just going to be a tool for kiddie pornographers and terrorists and all that. And then it immediately went up six times in the quarter of, in the course of just a few weeks.

• 2:54Speaker 00

  You're a great, you're a great investor for that.

• 2:56Speaker 01

  Oh, yeah. Well, I mean, if that happened last year, I would have been a crypto fund manager, but

• 3:04Speaker 01

  at that point I was winding down my previous startup. So I came at this from the angle of, you know, buy, sell, hold, like, how am I going to, should I sell this and just chalk it up as a win and then, you know, use that to cover rent? I ended up going down the rabbit hole on a long weekend in, I think it was like Halloween weekend of 2013 and decided I was just going to be all in on this. And it was really where I thought I might be able to spend the rest of my career. So I sold whatever a good finance professional should do. I sold my 401k and took the penalty, used half of it to buy more and then the other half used to pay rent.

• 3:41Speaker 00

  You're gonna love this. So there, there's a video that has never been made public. I'm not gonna tell you who has it, but it's of me saying, if Bitcoin goes to $3,000, 401k's gone, I'm going all in.

• 3:54Speaker 01

  Oh, man.

• 3:54Speaker 00

  So I'm putting that on the record now, if it happens.

• 3:57Speaker 01

  I hope we don't, I hope we don't go. Part of me hopes that we do. And then the other part is it's, it's, it's very painful.

• 4:02Speaker 00

  We'll see.

• 4:03Speaker 01

  The 85% is a lot. Yeah. But because that was 23rd. So, okay.

• 4:08Speaker 00

  So twice before.

• 4:09Speaker 01

  I get in right during the first bubble and then broke the Malco story in short order because I was writing a daily email newsletter, much like, oh, you really started to build your following.

• 4:24Speaker 01

  I got to know most of the executives and then for better or for worse with that story, you know, still maybe one of the biggest in the industry's history. Everybody knew who I was overnight, even though I was just this, you know, 28 year old kid that, you know, really didn't know anything yet, still don't. But one of the people that I got to know is Barry Silbert. Joined DCG before it was DCG, who's the first hire, kind of a Skunk Works employee at Second Market, helped recruit the core team. We raised a large round of funding in the doldrums of 2015. And I was helping with seed investing, given my background, but.

• 4:57Speaker 00

  Before you go on, I want to talk about this for a second. What was the general pitch? Right? So 2015.

• 5:04Speaker 01

  The DCG pitch?

• 5:06Speaker 00

  Just to recruit people, right? So there's not that many people who really know about crypto outside of, you know, a small subset of the population. It's not really covered by CNBC.

• 5:15Speaker 01

  I actually, it wasn't exactly like that because there were a lot of people that got hooked intellectually in 2013 during the run up.

• 5:25Speaker 00

  During this, what was the second bubble?

• 5:27Speaker 01

  Yeah. And so, you know, and then everything crashed and, and, you know, there was a vicious correction. So a bunch of people washed out, but the people that like, this happens in every single bull and boom and bust cycle, like some people stay. At that point though, there were no business jobs, right? There was no way for you to do this full time and get paid to, you know, kind of scratch the crypto itch because the industry was just so, so much smaller. And the only people that were getting jobs were, were the developers, right? And there were only a few funds, right? It was like us, Pantera, Blockchain Capital, you know, maybe a couple of others, but that was, that was pretty much it. They're all small at the time too, right? Obviously now, you know, we kind of take, we hear about another

• 6:09Speaker 01

  hundred, you know, million dollar fund every, every other week, it feels like, which is great, right? Cause there's a lot more talent that that's coming in that's fundable, but, but still it was, it was much different. So it was, it was actually pretty easy to find people that were of like mind that were really, really excited about it. So, you know, obviously, you know, Meltem joined very, very shortly, you know, after me. And, and then, you know, Travis, a few months after that, but, but, you know, when I joined, I said, you know, I don't really want to. Just be cutting seed checks. I just started a company and it didn't work out, but I like to be on that side of the table.

• 6:49Speaker 01

  So as soon as we closed the fundraiser, CoinDesk came up for sale. I was like, ah, this is perfect because we were thinking about doing a large event. And, you know, I had this vision, okay, we could do like the money 2020 for crypto. And CoinDesk had, you know, phenomenal beta run in the consensus 2015 event. It was a single day event here in the Time Center.

• 7:10Speaker 01

  New York Times building right here and right out of Times Square. And, you know, we said, we'll buy the business, we'll restructure it, we'll bring the team over here to New York and we'll use basically the CoinDesk brand almost like as our top of the marketing funnel for the event. And so between that and then the DCG network and all the portfolio companies we had, we were able to throw fuel on that fire and over the course of the next couple of years, you know, grow the event itself about 10x.

• 7:38Speaker 01

  And got the business to profitability and now they're off to the race. I mean, this year they're going to have a monster year. So so that was CoinDesk. Those guys are doing great. I think most of the team's still there, which is good. I took a sabbatical last summer after CoinDesk. And, you know, just trying to think what I wanted to do next, started to go down the Ethereum rabbit hole. Is there a there there for anything that's built on top of Ethereum or is it all just like pyramid schemes and and kind of get rich quickism, which, you know, directionally was not an incorrect bet, but my

• 8:12Speaker 01

  through the process, I pretty quickly got excited about the potential, even if none of the assets themselves were super attractive at that point. It was just, you know, I made the comparison, okay, Bitcoin was like the central bank of the new technological era and Ether is the new investment bank because it didn't take off because people were using it for distributed applications. It took off because it was becoming a reserve currency for ICOs. So. The first thing that I try to do is just understand the supply dynamics of some of these assets and you'd go down the top 10 on CoinMarketCap and you couldn't figure out what the circulating

• 8:54Speaker 01

  supply was for, you know, these half billion or, you know, multi-billion dollar currencies that were in the top 10. I mean, even Ripple, even EOS and some of these other larger ones, you have no idea how much is actually held by third parties and how much is held by the founders and the companies.

• 9:14Speaker 00

  The thing that was so interesting, I forget what day it was, I think it was last year, when CoinMarketCap basically changed some of the data, right? They just said, "Look, I can't remember if they said they were counting incorrectly or they used a new dataset or cleaned the data" or whatever they did.

• 9:26Speaker 01

  Yeah, that graph's in our pitch deck.

• 9:29Speaker 01

  Just a need for better data. And, you know, I'm actually very quick to defend CoinMarketCap because, you know, we've been, you know, in the thick of this for the last, you know, 14 months now, trying to figure out like how to produce better data for the industry. And we'll, you know, I'm sure go through the full Messari pitch, but it's not easy because there are no standards from the exchanges. They actually do a very good job.

• 9:51Speaker 00

  I was gonna argue that everyone still uses it, right?

• 9:54Speaker 01

  Oh yeah, that's the dirty little secret. Everybody uses CoinMarketCap, right? You know, luckily, we're able to wean ourselves off of that, you know, pretty quickly. I think we're still in process, but for like the long tail of assets, you know, they're still the only game in town. So for some of the major assets, you know, it's a different story. And for some of the exchanges that actually have very clean documentation, but, I mean, that's a big lift, what they've done. So now there are others, us included, that are, you know, starting to put this together and, you know, hopefully up the standards. But it's gonna take a lot of time and energy and between, you know, them and us and guys like Nomex and so on. I think, you know, better solutions are coming, which is good. But, you know,

• 10:38Speaker 01

  the kind of core thesis behind Messari was, we had to actually usher in an era of transparency from the projects themselves, because so much of the really material data about these new assets, by definition, were only gonna be known by these token sellers. Because of the reserves, because of the founders' rewards and the vesting schedules and, you know, what restrictions they put on resale for any of their pre-Ico investors. That's a lot of hidden inflation in the system. And we were trying to model that out, Dan McCarty, my co-founder and I, and- And you know, I had written a couple of blog posts on the subject and he DMs me. We'd worked together previously. We funded one of his earlier companies at DCG.

• 11:23Speaker 01

  And he says, you got to check out this, the side project that I'm working on. And he sent me the link for on chain FX. And I think I called him like 15 minutes later after I looked at it. I was like, this is amazing. Like, we're going to start a company together. Like, we can do this, this is blah, blah, blah. He's like, hey, that, that, that sounds fun. Tap the brakes. You want to get coffee?

• 11:43Speaker 01

  But the rest is history, right?

• 11:44Speaker 00

  So little did he know.

• 11:46Speaker 01

  Oh, yeah. But, but I mean, it was like same wavelength. What he had already put into code, you know, I was banging my, my head against the desk, trying to put in Excel. And, and I think the, the marriage really worked out because on chain was the front end. But we both talked about it. And we said, the ethos of this industry is not going to just allow another Bloomberg, another walled garden of, of data to emerge. You're going to need some base data layer and some common standard that people can access. So we decided we were going to build an open data library at Messari and focus on disclosures from the projects themselves. And then, you know, on a more proprietary basis, we would do the Marcus data integrations and, and, you know, actually spin up these nodes for the different networks and, and parse blockchain data.

• 12:31Speaker 01

  And then, you know, progressively over time, pull more and more proprietary info. But certain information like who's on the team?

• 12:38Speaker 00

  Yep.

• 12:38Speaker 01

  What's your fucking website? Like, what's the circulating supply? Like, that's kind of table stakes for, for an industry, even as, as nascent as crypto, right? You want to know that information and that shouldn't be behind a paywall. That's, that's like front of an S1.

• 12:55Speaker 00

  I was just gonna say, most of the information that becomes public in the non crypto world is through the S1s. Right? And, and so all of the things you just described in terms of, you know, what's the cap structure? What are some of the lockups, right? Some of this hidden or, or harder to get information?

• 13:15Speaker 00

  Naturally comes public through disclosures of the IPO process.

• 13:20Speaker 01

  And this is tricky because the SEC obviously thinks everything is a security. And many, like many of the processes, they did look like securities offerings in terms of like how they were sold. Okay, these tokens weren't useful when they were sold, blah, blah, blah. Obviously, people were speculating like crazy. We don't think that most, well, I shouldn't say most. We don't think that many of these tokens that we look at on a day to day basis structurally are securities. Like, we just don't agree with that, but there's existing precedent. And if it looks like a duck, quacks like a duck, walks like a duck, you know, the SEC is going to say it's a duck. But, you know, as we think about disclosures and how we can actually bring some common sense disclosures and transparency to these assets. Let's start with the extreme.

• 14:04Speaker 01

  Who speaks on behalf of Bitcoin? Who speaks on behalf of Nero?

• 14:09Speaker 00

  You're not followed on Twitter by the Bitcoin CEO? I've got like six of them following me.

• 14:14Speaker 01

  Oh, yeah. Well, I mean, aside from those guys, of course. So, and the SEC has even said, right? Like, you know, Ether probably not a security anymore, which implies maybe it was central. So if that seed has already been planted, there's probably a continuum. And what, one of the things that we're trying to do, because we do believe in the future of this ecosystem and many of the assets that haven't even emerged yet, but that will emerge. We're trying to make that path a little clearer. And if you think about the regulatory mandate that most securities regulators have, they just want to protect investors and promote fair and efficient markets and ultimately facilitate healthy capital formation,

• 14:59Speaker 01

  all of which, you know, has been missing in crypto, but is starting to get a little bit more tightly wrapped.

• 15:06Speaker 00

  Absolutely. It would be fair to say that Misery's.

• 15:09Speaker 01

  Misari.

• 15:10Speaker 00

  Misari.

• 15:10Speaker 01

  It's Italian.

• 15:11Speaker 00

  Misari, Misari. Look, you're going to like really confuse me.

• 15:14Speaker 01

  No, I just, I just wanted to give you a hard time, but it is Misari.

• 15:20Speaker 00

  If you could see him, see him sitting here saying this to me with his Starbucks cup, you would just be like, go home.

• 15:29Speaker 00

  But is it fair to say that the goal here is transparency of data? Or is there some other way that you normally describe it?

• 15:40Speaker 01

  Well, our, our mission is to promote transparency and smarter decision-making in the industry. And it's always been those two things, right? So on-chain FX was always this fundamentals oriented investor tool. Messari was all about transparency because you need certain inputs to get the outputs that you want. That are going to be like fundamentals, right? So, yeah, so, so we think about, okay, if we're going to be the one setting some of these data standards, how do you do that without some government or regulatory body or self-regulatory body that comes and has some type of enforcement teeth to make those rules?

• 16:15Speaker 00

  What do you think the answer is?

• 16:17Speaker 01

  Well, we're going to talk about token curative registries, I'm sure. And

• 16:21Speaker 00

  Let's talk about them right now.

• 16:22Speaker 01

  Yeah, so I think you can use economic incentives.

• 16:26Speaker 00

  And you're talking about the economic incentive can drive a

• 16:30Speaker 01

  Enforceable disclosures.

• 16:32Speaker 00

  A collection of people to all follow the same rules and actually have some sort of

• 16:38Speaker 00

  stick that

• 16:39Speaker 01

  We call, we call it the crappy data chasm, right? So, so earlier this year, we launched Agora, which is our open library that we have 200 plus community analysts contributing crypto asset research into. That looks a lot like Crunchbase. The problem with Crunchbase is that the information is static and that's fine for private markets because any new venture investor is going to do their own due diligence in ensuing round.

• 17:02Speaker 01

  In crypto, you have private market information asymmetries and public market liquidity. So you need events driven disclosures and you need to find a way to level the playing field. But there is no top-down regulator that can Globally enforce these standards because these assets trade across borders, right? By definition. So you're not going to have a global equivalent of the SEC, at least not one that really works. And self regulatory bodies only work when they're actually sanctioned by a regulator, right? FINRA with the SEC, NFA for the CFTC, and those are like 80 and 40 years old respectively, the regulators. So without that type of teeth, how can you actually herd cats and

• 17:43Speaker 01

  create some economic pressure on projects to abide by event driven disclosures and some type of common standards? So that the quality of the data that's in those libraries doesn't just degrade over time?

• 17:54Speaker 00

  I don't think a lot of people know, when you say event driven disclosures, describe what that means.

• 18:00Speaker 01

  If a, if you're selling off your token treasury, if a co-founder leaves.

• 18:05Speaker 00

  If.

• 18:06Speaker 01

  So specific predefined moments. If there's an actual partnership that you're going to announce that that is real and is not just, you know, marketing fluff. Those are the things that move markets. And if you, and, and, you know, it's very easy. And in fact, it probably happens all the time. People get tipped off on any, you know, major announcement. And you see this, you know, it's very difficult to prevent insider trading. That's why, you know, Coinbase is, and they're trying to do things as close to the, you know, by the book as possible and try and do things the right way. And even still, you'll see some of those assets, when they announce a new listing, a few minutes before, it's not much. Like they, it's impressive how, how tight to the vest they've been able to keep it.

• 18:47Speaker 00

  They've gotten much, much better.

• 18:47Speaker 01

  They've gotten much, much better. But it's still, you still see like in the, in the minutes, right? You see some action. So like, you know, how, how do you prevent that? So we're trying to get closer and closer to leveling the playing field. And how do you create one common data library where everybody would have access to that information at the same time? So we said, we're going to build this open source. We're going to build APIs that allow anybody to freely access this information, including maybe our direct competitors for some of the, you know, others, you know, SaaS solutions that we offer. And ultimately, we shouldn't even be governing this open source system.

• 19:25Speaker 01

  So one way that you might be able to create some urgency and consistency of disclosures would be to create a registry of provably transparent projects. And if you had them actually put up some financial stake and they broke the rules, then they could get booted off the registry loser stake. And you know, in the long term, if you can actually bootstrap that credential and the market deems it as valuable and exchanges use it, banks use it as a seal of approval that if you don't have, we're not going to do business with you. Then it becomes something that's, that's kind of really powerful. And because you actually have money locked up in the system, you can incentivize a third

• 20:08Speaker 01

  party validator set, like, kind of like a big four accounting firm, but on a global scale, or even just incentivize whistleblowers. You now have a pool of financial incentives that would encourage people to do the work to make sure that projects are being legitimate and they're following the rules of the system.

• 20:26Speaker 00

  If you and I have a project and we're interfacing with this and we've got the economic incentive that is staked, we do something nefarious and we lose that, we get booted out. Do you think that, because I think of it as kind of a carrot and stick. And the stick, is it the incentive or the economic loss? Or is it the ensuing reputational impact that comes from the economic loss?

• 20:52Speaker 01

  Today, it's probably just the economic loss. If you can build a network effect around this and it hits scale, then it becomes reputational loss.

• 21:01Speaker 00

  Got it, because it's basically saying, I'm trying to think of like a comparison, but it's, you know.

• 21:05Speaker 01

  Like delisting.

• 21:06Speaker 00

  Yeah, delisting off a stock or if you're some sort of, you know, bad actor or something from raising capital or whatever. Got it. Okay. Where are you guys today, right? In terms of what you've got built, you guys just launched the new website and stuff. So kind of walk us through the product offering as it is today and then kind of let's just touch on how you see this evolving over time and what work you guys have had at you.

• 21:28Speaker 01

  Sure. So, you know, I've always been a firm believer that data without any type of context is useless. And, you know, narratives without any type of data is also equally useless. And we've got a lot of that in the industry on both sides, right?

• 21:40Speaker 00

  Get off Twitter.

• 21:41Speaker 01

  Yeah, exactly. I've taken, I've been on diet Twitter. So I go on every once in a while, but I've been trying to, trying to limit my intake. You know, I, I generally think that we're coming at this from three angles. So we've got curated news, research, analysis, very tightly synthesized and tagged and categorized that it's easy to search. And it's easy to come up with a repository of information if you're trying to get smart on a person, a project, company.

• 22:08Speaker 00

  And so this is what I'll call third party or external media, right? So this is everything in the Bloomberg, the block, all these different media outlets that are producing.

• 22:16Speaker 01

  Aggregated, summarized, tagged, categorized.

• 22:19Speaker 00

  And then you guys are doing proprietary research and also some summarized news yourself?

• 22:26Speaker 01

  Yeah, I mean, I'd say that like our newsletter is a synthesis of everything that we see on a daily basis. And it's, you know, it's also, you know, primary marketing channel, right?

• 22:36Speaker 00

  How do people find the newsletter? It's very good. It's one of the ones I open every day.

• 22:39Speaker 01

  It's right above the folds, top of the homepage, massari.io.

• 22:46Speaker 01

  Yeah, it's, it's very sophisticated. I wish I had an Italian, I'm not even, no, I, I strike that, edit that out, that, that botched Italian accent impression.

• 22:57Speaker 00

  So you've got the news.

• 23:00Speaker 01

  Do you know where the name Massari comes from?

• 23:02Speaker 00

  I do not.

• 23:03Speaker 01

  This is fun. So the

• 23:04Speaker 00

  Well, you just said Massari Ferrari. So if that's where it came from.

• 23:07Speaker 01

  Well, it's, so it kind of plays off of the, the merchants of Venice. So the, the Venetian merchants were the ones that popularized double entry bookkeeping. And actually, it's fascinating because a Franciscan friar, Luca Pacioli. I was the one that actually wrote down the Venetian playbook for accounting and popularized that. And he was able to popularize it in large part, and it stuck because for the longest time merchants were not exactly the most revered professions, right? Money changers, etc. And he kind of changed that because he was able to convince people that clean books was not just good business, but kind of a moral imperative. If you're going to trust the people you're doing business with. And obviously, you know, that is a big reason

• 23:51Speaker 01

  that we had a capitalist explosion in the, you know, after the 14th century and Renaissance.

• 23:56Speaker 00

  That was a great marketing ploy by him to change the narrative there.

• 23:59Speaker 01

  Oh, yeah. Phenomenal. Right. And so that's what we're trying to do with crypto, right? But instead of double entry, we're talking about triple entry accounting using these, these public ledgers. How do you actually parse them? How do you build standards around them?

• 24:11Speaker 00

  My favorite thing, my favorite thing is the first time you say triple entry accounting to anybody in finance, they look at you like you've got two heads. What the hell is that? And then when they look into it, I go, it's actually pretty interesting.

• 24:22Speaker 01

  Yeah, exactly. Yeah, maybe we wouldn't have had a financial crisis. Or maybe the next one will be so much worse. We don't know yet.

• 24:30Speaker 00

  We'll get there in a second. All right. So let's go back to the product itself. So you've got the new summary analysis.

• 24:36Speaker 01

  So there's curated content and then quantitative data, which is markets data and blockchain data primarily, but also, you know, other, other bits of information. So that's primarily on chain effects.

• 24:47Speaker 00

  Okay. How do you get the quantitative data?

• 24:50Speaker 01

  So if it's markets data, it's exchange integrations, pulling from their APIs. If it's blockchain data, we're spinning up our own nodes for all the major networks. And then, you know, parsing those data sets and, you know, throwing them into a database and, and running our own queries. And then, you know, over time, I think we want to add more and more data feeds. So, you know, there's a really interesting company called Hive that does Twitter rankings, but based on, instead of like page rank that Google has, it's kind of like people rank. So they do the rankings not based on the number of followers, but on who, you know, do you have really high quality followers and vice versa. And so like they've created this, this web. So something like that, if we're talking about.

• 25:33Speaker 01

  People data, then you know, we'd plug something like that in hopefully. And I think we want to continue to do that with, with, you know, very high quality data feeds. Whether it's ours or somebody else's.

• 25:44Speaker 00

  Well, the beauty of this is you're taking a hybrid approach. You can integrate or you can build it out yourself. And I'm guessing.

• 25:50Speaker 01

  It's builder by.

• 25:51Speaker 00

  Is that you can, the default is you're going to build it yourself unless there's something that's better.

• 25:56Speaker 01

  Yes, right. That's a good way to think about it.

• 25:58Speaker 00

  All right. So you got qualitative data, quantitative data. What's the third?

• 26:02Speaker 01

  And then there's this disclosures library, right? So it's the first party disclosures from the projects themselves. And we kind of put that into its own category because it's relatively static information. It shouldn't change too much, but as soon as we have it and we can consistently go back and, and you know, check against it. Then, you know, we can build software around it that, that makes that ongoing disclosure headache go away long term.

• 26:30Speaker 00

  So, so let's talk about this for a second though. You and I've got a project, we kind of do everything we're supposed to do. We put the disclosures out there. They know who the founders are, what the supply is, what the treasury, you know, the whole nine yards. When we go to, let's say, sell some of the treasury. What, how does the product or other people in the ecosystem know that we sold some of the treasury if we don't report it?

• 26:57Speaker 01

  You don't.

• 26:58Speaker 00

  Okay, today.

• 26:59Speaker 01

  Yeah.

• 27:01Speaker 00

  And the incentive.

• 27:01Speaker 01

  So, so one of the fields in our application is what are your treasury wallet addresses?

• 27:09Speaker 00

  And then.

• 27:09Speaker 01

  So we can just look directly at the blockchain.

• 27:12Speaker 00

  And you periodically will.

• 27:14Speaker 01

  And, you know, because we have these nodes spun up, we will just flag those wallets. And if funds move, then we, you know, would send a ping to the system and could reach out directly to the project and say, hey, was this an internal transfer? Was this a distribution? Did you just do some type of business deal where you had to transfer this? Like what, you know, help the tagging categorizes.

• 27:35Speaker 00

  This is the fun part about this entire industry, right? Is what you basically.

• 27:38Speaker 01

  And by the way, this is only, this is only from the project itself or like whoever is making these attestations. So, you know, no one's speaking on behalf of the entire token supply because once it's out, it's out. And that goes back to the comment I had about, you know, these assets. Existing on a continuum, right? Probably all start fully centralized and look a lot like a security. And that's why we have things like the SAFT. Long term, fully decentralized. That's at least the goal. And so if we can help on that path, should a project, should there be any person, company, entity that files or does any disclosures with us? Once the treasury token supply is depleted or an entity no longer officially exists to control the development roadmap?

• 28:23Speaker 01

  Probably not, right? And so you could have projects that no longer do any type of disclosures in Missouri not because they decided they were going to be opaque, but because they didn't have any stake? Like who's to speak on behalf of Bitcoin? That kind of thing.

• 28:37Speaker 00

  Yeah, it's funny because what you're essentially doing is you're getting people to opt into a disclosure system when there is a low likelihood of nefarious activity, right? In the beginning, early, when there's more centralization, everyone's gung ho about doing the right thing, they're probably fundraising or just fundraising, all that stuff. And the longer, or the further you get away from that point in time, the more important it is actually that they already opted in, right? Because now you actually are, you kind of got your hooks in. And so if they start to do things that maybe they actually wouldn't necessarily disclose, you can detect something happened, right? And you kind of figure that stuff out.

• 29:16Speaker 01

  I wouldn't, I wouldn't frame it quite like we have our hooks in, right? Maybe this is just marketing speak, but no, seriously, I mean, the projects that we're working with, so we're going to announce our first dozen or so, the week of consensus invest here in a couple of weeks.

• 29:30Speaker 01

  They're all projects that are already pretty transparent by design. The issue is there is no single place to host all that information. No one has represented they would build an open source project out of something like this and truly make this freely accessible to anybody. And really, very few companies have the cloud or the distribution channels to actually brute force something like this into existence. I'd say Binance, right? They, they do have real clout because if you want your token traded on Binance, they To do something, you know, how high do you need me to jump, CZ, right? Like, that's, that's real. The question is, do you want that owned by the largest exchange?

• 30:12Speaker 01

  Or does that create an issue in terms of monopoly of information? And so I think our approach to make this completely open source is, is, you know, it's going to work. Whether we do it or we do it, you know, with other partners and, and, you know, we can work on this together. We don't, it doesn't really matter to us because we're not making money on it. We're just trying to design the system that'll actually get this off the ground and ensure that

• 30:38Speaker 01

  the industry can continue to exist and flourish and people don't go to jail.

• 30:42Speaker 00

  Listen, I, I think people don't understand, or they don't understand yet how important the work you guys are doing is. And I think over time, it's going to become more and more obvious to more people. So I'm cheering for you, but.

• 30:53Speaker 01

  Thanks, Bob.

• 30:54Speaker 00

  Yeah, it's like the only nice thing I'll say.

• 30:58Speaker 01

  I wouldn't say that.

• 31:00Speaker 00

  I was about a couple of more macro type things in crypto. One, you recently tweeted that there's a issue around Bitcoin with fungibility. And you said you were overweight Monero. Explain what you mean by all that and kind of how you think about it.

• 31:17Speaker 01

  Dan, my co-founder calls this the consensus contrarian portfolio, which is Bitcoin, ETH, Monero and Zcash, right? Like all the, basically all the true cryptocurrencies, if you want to play that card. And, you know, I, I've written about this a number of times over the course of, you know, many years. The, the thing that is, one of the things that's still kind of scary about Bitcoin is they're not, they're not private, right? So with enough forensics, you can trace most actors in the system.

• 31:54Speaker 01

  And that's good for catching bad guys. That's not great for censorship resistance. And we already see kind of anecdotally, some of this behavior play out where, you know, large institutional buyers, like in the past, have gone directly to the exchanges and said, give us virgin coins. And they'll, they'll pay a premium because they don't want to have to deal with all the, the coin taint. Who's actually owned it, right? Has this flown through Iran or some, someone on the OFAC sanctions list?

• 32:25Speaker 01

  And so if you kind of zoom out, if this asset class continues to grow and grow and grow, one of the things that is a threat when people use crypto, even though we say, oh, if you don't hold your keys, like it's not your keys, not your crypto. Most people are going to use a third-party service, right? And that's the other dirty little secret in the industry. Everybody knows, don't hold your crypto on exchange, but so many people do, except for like the stuff that you really sock away.

• 32:51Speaker 00

  This, and this may be really controversial, but I actually.

• 32:55Speaker 01

  But basically, basically, if that's the system, you have two types of coins, right? And so they're not perfectly fungible, which is why I made the statement about Monero. I, I, I, there's definitely a lot of developers that are talking about this, but none of that, but none of the companies really are. And to actually pull off incorporating something like confidential transactions or Mimblewimble or any of these, you know, cloaking features, you're going to need a broad community consensus. And some of the regulated entities might just say, I don't know if we can do that because that puts us in a pretty bad place. We can't use chain analysis. We can't use elliptic now and we can't, you know, represent to regulators that we're surveilling, you know, potentially suspicious transactions.

• 33:37Speaker 00

  So I'll buy that, that the regulated entities are not going to be ecstatic about doing it. But at some point, if you've got virgin coins and non-virgin coins and you get the virgin coins into the hands of some party, over time, the number of virgin coins is going to decline until eventually it could be zero, right? You end up with all non-virgin coins because they've all been transacted. Is it something where you think at that point, it's just there's one bucket of coins and it's all non-virgin coins? Or do you think that there's like a good actor, you know, where you can actually trace, hey, these are all good actors in KYC, AML, you know, et cetera? And then there's the we don't know bucket?

• 34:18Speaker 01

  I think the, the issue is just with enough forensics, you can basically say these are blacklisted, these are whitelisted, right?

• 34:24Speaker 00

  So you think that there could, like, let's take Bitcoin, for example, there could be a separation of good Bitcoins and bad Bitcoins for, you know, for lack of better terminology. Some people will definitely avoid the bad Bitcoins.

• 34:38Speaker 01

  Yeah, I mean, you know, people were talking about this back in, in 2013, you know, earlier, right? But, you know, certainly when I, when I first got in, how do you actually? Should you be able to track?

• 34:51Speaker 00

  It's fascinating because of US dollars, right? It's that 70, 80% of US dollars have traces of cocaine on it, right? So if that, if you could label a physical US dollar as good or bad, you know, how much of the money supply would be affected and put into the bad category?

• 35:05Speaker 01

  Yeah. I always hear that stat and it's fascinating and I always use it. I think everybody uses it. I feel like it's one of those things that someone just made up and then a bunch of people said it and then it just happened.

• 35:14Speaker 00

  Look, I've looked. Here's the fascinating part.

• 35:16Speaker 01

  Is it real? Is it really true?

• 35:17Speaker 00

  So I've always used the 80% number and I looked, maybe this is probably six months ago. The number has actually been decreasing, which I did not expect, right? Because you would think, oh, the longer period of time, you know, the bills are in circulation. So actually it has a higher probability, whatever.

• 35:34Speaker 01

  Everyone's just doing heroin now.

• 35:36Speaker 00

  Jesus.

• 35:39Speaker 00

  I'm not even going there.

• 35:42Speaker 00

  All right. So the other thing I want to talk about is this idea of influence in crypto, right? And so there's a couple of different ways it gets applied. There's like the Twitter influence was just how many followers do you have? Who are they? And can you get them rallied up to go do something, right? Or be excited about something, whatever. Then there's like the hash wars type influence where can you actually get people with computing power to go your way? When there's contentious hard forks, all that kind of stuff. And then there is what I'll consider a logo influence, right? Which basically means if you're an investor and your logo is on something, that must mean it's legitimate. If you're a news source and you wrote it, it must be legitimate, right? All that kind of stuff.

• 36:27Speaker 00

  Those are three very different types of influence. But in crypto specifically, the impact of exercising that influence is unlike any other industry, in my opinion, right? So if you look at, if you can get on Twitter, a bunch of verified accounts to tweet about a project, the odds that it becomes legitimate in the eyes of people is really important. And I'll use it as a direct example. So Tron, there's a person who leads a project with a verified account.

• 36:58Speaker 00

  Also, they start tweeting about it. There's a lot of people who immediately put more credence to what the verified account is saying about that project than let's say maybe another project that has no verified account as the creator of the project. How do we deal with it, right? Because what you're doing is you're going to have to transparency of the information.

• 37:17Speaker 01

  But You're talking about reputation scoring, which is just a, you know, mathematical way to do what we already do, which is

• 37:27Speaker 00

  But can we do

• 37:28Speaker 01

  Assess brand quality and and trustworthiness.

• 37:31Speaker 00

  But but I think that with the reputation scoring, you've got to get to

• 37:35Speaker 01

  I will I will agree that you can move markets much, much faster in crypto, at least for now.

• 37:39Speaker 00

  Yeah, okay.

• 37:40Speaker 01

  With with with with, you know, things like just having a brand and using some of those social cues. But I would argue that part of the reason that's true is because there isn't really good data in general, and there certainly aren't good data aggregation or information aggregation platforms. Um, you know,

• 37:58Speaker 00

  And it's hard for the counter narrative to fight back.

• 38:02Speaker 01

  Well, yeah, because we live in an era of fake news and everybody, you know, like, you know, everybody's opinion seems equal on the internet, right? So I don't think reputation systems are inherently bad. Like, we we use those heuristics all the time, like the verified, not verified. And this kind of goes back to the token curator registry example. Um, you know, you want to be on a list versus off. Uh, you know, we're very good at making lists. I like, um, I always say that I like the the token curator registry primitive because lists are probably the one thing in this industry as an application that's older than money. Right? Like, it's hardwired in our DNA to be able to make like, okay, this is the list of plants you shouldn't eat. Like, this is the this is the the census of the village. If you don't recognize this person, then he's here to kill you.

• 38:47Speaker 01

  Like, we're good at those. Um, and then, you know, That you know that there's intrinsic value to having certain information and you know that you have a limit on how much information you can handle. So you need those heuristics. So the question is, how do we get better at actually doing reputation scoring? And how do we make sure that people don't get duped by a bunch of fake accounts from an army that's trying to create a new world currency? I'm not going to name it names. You're smiling ear to ear. Don't make me do it.

• 39:20Speaker 00

  What I'm actually thinking is, you know, we're talking about the reputation and verified accounts is the easiest thing, I think, because it's on a list of verified accounts or it's not, right? But where I think it becomes really interesting and potentially dangerous, depending how it's used, is we just sat and watched the Bitcoin Cash, like the fork of the fork, I think you guys called it, right? And it is some, it's like half popularity contest of like, I mean, literally like high school politics type stuff. And then it's half like, a bunch of technologists sitting around, like really trying to figure out what's better, what's not, how's this going to work, etc. And those two things clash so

• 40:02Speaker 00

  violently in these hard forks. And they're led by people and it's all about influence. I mean, it is literally, I believe this person over that person. And I was thinking about the other day, it's like-

• 40:14Speaker 01

  We're also at the stage where that can happen because no one uses crypto. It's all funny money.

• 40:20Speaker 00

  Okay, explain this more.

• 40:21Speaker 01

  It's all, it's all game right now. It's all funny money. There's no, there's no fundamentals. There's no underpinnings. No one uses even Bitcoin for transactions. That's, that's probably the one exception. Like, yes, some people are using Bitcoin in Venezuela in, you know, dark markets, right? Like, okay, that's a single currency and still 99% of that currency is just based on wild speculation. So of course narratives are going to move the markets.

• 40:48Speaker 00

  We've now started to say holding is a form of usage.

• 40:53Speaker 01

  Yeah, that's how bad it is, right?

• 40:56Speaker 01

  And it's not, it's not entirely inaccurate, right? Because you got to shore up the monetary base, right? Like, this is, this, you know, I actually believe that there's an argument to it. Reservation demand, otherwise. And this is the problem with all the payment tokens. And this is how you knew that most of them were going to go down 99.99% until they get all the way to zero. But you can't do that really with crypto. But, but basically, these, these payment tokens are completely worthless because there's no reservation demand. If you need to actually use a payment token to access a service, you'll only hold it for as long as you need to use the service, which is normally a split second. And then you're out, right? So if you're just converting in and out, in and out, and you don't have any reason to hold any working capital, then it's, it's all funny money, right?

• 41:38Speaker 01

  And as long as people aren't using Bitcoin Cash, or even Bitcoin, or Ether, and go down the list,

• 41:47Speaker 01

  yeah, then, then you're going to have a bunch of people that got paper wealthy, ridiculously wealthy from, from this asset class. They're going to be able to throw their weight around and make wildly outlandish decisions about how to spend their money. And, and, and the game theory gets all thrown off because these people have, you know, more money than they know what to do with. And it's now just about egos. I, I think the worst part about what we saw the last couple of days,

• 42:16Speaker 01

  I can't imagine the SEC approving an ETF this year. I just, I can't. No way. It's not, it's, it's just, you, you watch, like, you just, again, not going to name names, everybody can look it up. But you just watch those principals, like, going back and forth. It's fucking embarrassing. And this is a multi-billion dollar asset, right? So if that, if that's the current state of things, then, you know, we've still, we've still got quite a ways until.

• 42:47Speaker 01

  You can actually put this in your 401k reliably.

• 42:50Speaker 00

  Opinion when it comes to ETF.

• 42:52Speaker 01

  It's dangerous, so it should be a little bit harder to access, I guess, is my general thinking.

• 42:56Speaker 00

  I don't think the ETF even goes like Q1. Like, I could see ETF being like another year away, right? So we're in, you know, just like Q4, like it could be much farther than people think.

• 43:06Speaker 01

  The only, the only argument I think for the ETF is people, if you're gonna drink here, if you're gonna drink, do it here, we'll take your keys, right? You know, I guess that's the, that's not a bad argument, right? People are gonna speculate with these assets, would you rather do it in a regulated, more secure vehicle? That's got some rules in place. That makes sense.

• 43:26Speaker 00

  Fair.

• 43:27Speaker 01

  And that's, that's the argument for, for backed and fidelity and, and, you know, all these other big legitimate institutions that are getting into the space.

• 43:35Speaker 00

  The other thing I could see happen that this goes to the 3K Bitcoin price, I could see ETF getting approved, let's say Q1, and then we go down 50%.

• 43:44Speaker 00

  Right? So basically, the, the big moment everyone expects, oh, if the ETF gets approved, then we're gonna be off to the races and price is gonna recover.

• 43:54Speaker 00

  If for some reason the ETF gets approved and it doesn't do that, then what happens?

• 44:01Speaker 01

  I mean, I, I don't do price predictions, really. I'm really bad at it.

• 44:05Speaker 00

  Forget price predictions. What I'm talking about is.

• 44:08Speaker 01

  Sorry, maybe I missed the back half of your question because.

• 44:10Speaker 00

  We just had microphone issues.

• 44:11Speaker 01

  The mic was collapsing.

• 44:13Speaker 01

  I thought I was having a seizure because it was just like slow motion.

• 44:17Speaker 00

  I think we got that on video. He, he looked at me like he did something wrong.

• 44:22Speaker 01

  I'm talking too hard.

• 44:23Speaker 00

  So, so, so the ETF gets approved, everyone thinks that's going to be a catalyst for price increase. Forget where it goes, but just increase. If an ETF actually gets approved and then there's not a price increase, we go sideways or down. I think those are the types of moments that really drive the capitulation and just like, like, people psychologically don't know what to do in that situation because there's been so much time and built in expectation around that moment, right?

• 44:53Speaker 01

  Yeah, just because the ETF gets approved doesn't mean all the institutions start buying.

• 44:57Speaker 00

  Absolutely.

• 44:58Speaker 01

  And, and, you know, that's the surprising thing. I think people were surprised that there wasn't more of a move on some of the news from like ICE.

• 45:06Speaker 00

  Fidelity backed.

• 45:07Speaker 01

  ICE is, is, is interested. Fidelity, you know, has a service and there's going to be more announcements like that. And the question is, you know, is, is anybody can actually step up and start, start buying? And if you just look at this from a momentum perspective, until the next rally starts, it's tough to see those institutions just piling in.

• 45:30Speaker 00

  For sure.

• 45:31Speaker 01

  None of the major institutional money managers are going to try to catch falling knife in a market.

• 45:38Speaker 00

  Oh, I,

• 45:39Speaker 01

  where it's personality driven, as we just discussed.

• 45:41Speaker 00

  I think there's a ton of funds are shutting down. We're in November right now, December.

• 45:48Speaker 00

  By Q2 of 2019, I think a, a larger number than we expect of funds start shutting down because of the high watermark issue. Right? So basically they monetized in

• 45:59Speaker 01

  Sure.

• 45:59Speaker 00

  December 2017. They don't understand the economics. 18 is going to happen, right? December 18. They're not going to make the money they thought they were going to make. And then all of a sudden, why am I doing this? It's going to take me another 18, 24 months to come back. They're going to start shutting funds down. And so I think that it, it could prolong bear market and all that stuff. Before we wrap up, I got two more questions for you, then you could ask me one, which scares the hell out of me. But you wrote this blog post about how people can get into crypto. Explain your logic as to what people should do if they want to learn, get involved, et cetera.

• 46:37Speaker 01

  Well, I was getting a lot of inquiries on, you know, this is in the, in the peak, right? December, January, and, and all hell was breaking loose. So I started to get just bombarded on Twitter and LinkedIn and, and, you know, a bunch of, and, and like good intentions, you know, not, hey, how do I make a quick buck? Like people saying, I'm really fascinated by this. How do I break into the industry? And I just wanted to put my thoughts on paper so I could just fire off a link. And, and, and so I wrote This blog post, The Apprentice Crypto, and it had a slant where I figured, hey, if this works, I'm just gonna put this out there. Maybe we'll get a handful of volunteer analysts that will

• 47:17Speaker 01

  help us populate some of this research in our open data library. And in it, I said, I get these questions all the time. How do you break in? My answer is write about this industry every day for two years for free. And then you'll probably have a few good ideas that stick during that time period, which is what I did. And it's kind of what you did. It's what Nick Carter has done. It's what Chris Bernisky has done, Kyle Samani. If you think about some of the non engineers that have broken in and just had an insane trajectory in terms of how quickly they were able to build their networks and followings, because the market is so wide open,

• 47:57Speaker 01

  and you're judged purely on the quality of your ideas and consistency, that's probably the best way to stand out. And that's the good part of Twitter, right? So, leading into my question, when are you going to write the social media playbook for crypto people? Are you really, really deathly afraid of losing all of your secret sauce?

• 48:22Speaker 00

  I've actually tweeted. People think that I'm not open to telling them.

• 48:27Speaker 01

  Actually, I do remember that.

• 48:29Speaker 00

  I tweeted, I said, listen, this is how you win at Twitter. And I made a list. And it was point by point, this is what you do. And here's the two things that are really interesting. So one is, there's just some people who are better at writing than others, right? And so, writing does not just what words you use, but how do you construct thoughts and kind of layer in and refer back and do all this kind of stuff. So, some people are really good at that, some people are horrible at it. I think that your idea of just writing makes people better, no matter where they are on the spectrum. But Twitter specifically, there's this quote that Naval, I think it's Naval had it. He was like, most blog posts should just be tweets. And so, literally, when I first started

• 49:10Speaker 00

  taking Twitter seriously, it was, I have all these thoughts of like, oh, I should write something about X. And I would never write it.

• 49:19Speaker 01

  Can I just distill it to 280?

• 49:21Speaker 00

  280.

• 49:21Speaker 01

  Well, this is back in 140. I love 280 like right out of the gates. I was like, you can actually write a full sentence.

• 49:26Speaker 00

  Two. So here's the secrets. When 280 came out, I was like, damn. We could put spaces.

• 49:32Speaker 01

  Drop everything.

• 49:33Speaker 00

  We could put bullet points, spaces.

• 49:35Speaker 01

  Yeah.

• 49:36Speaker 00

  So, all right. So we'll talk about, all right, let's talk about whoa, real quick.

• 49:40Speaker 01

  And I do have a one A because we were just joking about this before, but my one A would be, what tweet do you regret the most?

• 49:47Speaker 00

  Oh, okay. Uh, I actually know what it is. Um, but the, the whole thing around Twitter is that

• 49:56Speaker 00

  blog posts, you actually have to have enough substance in order for people to understand what you're saying. You have to have a point and you gotta kind of hammer it home to make it valuable. Sometimes you don't have all of that. On Twitter, you can actually say something that people find interesting, not because you hammer up a point, but because you made them think about something, right? And so you, you have more leeway and people kind of interpret things different ways, et cetera. The second thing is if you can show people you're excited, they get excited. They might not even know what you're talking about. And so there's been a couple of times I've tweeted, all capital letters, W H O A, right at the beginning of this tweet.

• 50:39Speaker 00

  And I go down to another paragraph and I type whatever it is and it says, whoa. And people, whoa, oh, okay. And so it's become this running joke now that, uh, I've got a couple of friends who they're like, I tweet, whoa. And there's no whoa in the engagement.

• 50:54Speaker 00

  But the tweet that I, I probably regret the most, and it's not, I don't regret it because I said it. I regret it because I actually didn't write a blog post. So this is one of the flip sides of, normally I, I like the fact that I just tweeted it, didn't write the blog post. This is one where I wish I'd written a blog post.

• 51:10Speaker 01

  Yeah.

• 51:11Speaker 00

  Uh, it's when I use the terminology, uh, the, the terminology around Bitcoin terrorist.

• 51:16Speaker 01

  Yes.

• 51:17Speaker 00

  And here's why.

• 51:18Speaker 01

  That was when you took the break. Was that, was it pretty soon after that? Uh, uh, sorry.

• 51:23Speaker 00

  It, it was right around.

• 51:24Speaker 01

  Tell the story.

• 51:24Speaker 00

  Right. Yeah. So. I'd come out and I'd said, listen, if tokenized securities work the way that I envisioned them working, tokenized securities will be more disruptive on a global basis than Bitcoin itself. And the entire argument was predicated on the fact that if Bitcoin was to completely replace all money, right, so actual fiat currencies, gold and silver, it's like $90 trillion or something, right? Global real estate alone is 215 trillion. So on a just a pure dollar basis, you know, changing real estate and completely ripping it out and having this new infrastructure is more impactful than money. Now, the Bitcoin maximalist came out of the woodwork, right? This was like the most blasphemous thing they'd ever heard.

• 52:08Speaker 00

  And so, both in private Telegram groups and on Twitter, all of a sudden, what you got was the propaganda machine.

• 52:15Speaker 01

  Yeah.

• 52:15Speaker 00

  Right? And I actually think most of them have super legitimate arguments. I tend to agree with many of the points that they said, now that I've spent more time with them and they've kind of explained it, etc. What just sent me over the edge was, I would say something, so, you know, some simple sentence, and they would then later on in the thread refer back to what I said with a little twist. Right? And I was like, whoa, I didn't say that. And I'd go screenshot, right, and I'd get in the whole thing. You know, like, this is what terrorism's like. It's propaganda machine and you basically bully people and you threaten and all stuff, right? Now, that's a word that everyone knows. Look, I am-

• 52:53Speaker 01

  It's a little, it's a little loaded.

• 52:54Speaker 00

  I'm prone to be hyperbole, right? But it was, this is bad, actually, right? If we all act like this, it is going to scare away the people who don't understand that, you know, the attrition of ideas and stuff is a good thing, right? It's gonna scare away the masses. And so, that's one where I wish I had really taken the time to write out, hey, here's what happened, here's why it's important, here's why I'm using this terminology, and here's what we need to do differently about it. Now, the funny part about that is, most of the people who are offended, I've now become friends with, and they've kind of come a little to the center of thought, I've come a little to the center of the thought.

• 53:31Speaker 01

  Are you not friends with anybody?

• 53:32Speaker 00

  I'm friends with everybody.

• 53:34Speaker 01

  I'm saying that is a good, I'm saying that is a good thing, yeah.

• 53:37Speaker 00

  The best part about

• 53:40Speaker 01

  It's tough to meet you in person. It's tough to meet you in person and not be like, I kind of want to have a beer with Pop.

• 53:45Speaker 00

  Well, I just think that

• 53:46Speaker 01

  That's why so many people like coming on the podcast.

• 53:49Speaker 00

  If you're positive.

• 53:50Speaker 01

  Yeah.

• 53:51Speaker 00

  Other people, no matter how much they hate, how much they have negative connotations, all stuff. You can kill people with kindness.

• 53:59Speaker 01

  I believe that. I need to get better at that. I just have way too many battle scars. So I have too much snark in my blood.

• 54:05Speaker 00

  You'll love this. Ready? This is, my girlfriend's gonna listen to this and she's gonna roll her eyes and might go to the back of her head, right? I texted her one day and I said, I hope you're having a great day. And she literally responded, lol, that's what you tell the trolls on Twitter.

• 54:20Speaker 00

  I was like, I've gotten myself into the position.

• 54:22Speaker 01

  Did you just copy paste it from like a tweet? That would have made it so much better if you accidentally had like the at somebody else and sent that whole thing, just as like a copy paste job.

• 54:32Speaker 00

  I was like, are you kidding me? I've now gotten myself in a position where I can't say that without her thinking that I'm trolling her.

• 54:38Speaker 01

  Look, man, there is, there, you can have too much of a good thing, I guess.

• 54:42Speaker 00

  Listen, it's, I'm long positivity, short everything else. We're good to go.

• 54:47Speaker 01

  Well, makes it fun for your guests, too.

• 54:50Speaker 00

  Yeah. Look, thank you so much for coming. People have to go watch the video because when the, when the microphone fell, that was pretty epic. We'll, we'll get a couple of screenshots and hopefully make a meme out of that at some point.

• 55:03Speaker 01

  I just felt like I had to do that then.

• 55:05Speaker 00

  He just did the finger guns at the, at the video.

• 55:08Speaker 01

  Um, it's been a long week.

• 55:11Speaker 00

  I appreciate it.

• 55:11Speaker 01

  I'm awful.

• 55:13Speaker 00

  We'll do this again soon.

• 55:14Speaker 01

  On that note, maybe there will be a part two.

• 55:17Speaker 00

  Thanks.

• 55:18Speaker 01

  Thanks, Pop.

• 55:21Speaker 00

  All right, guys, we're back here with John Belizere, the CEO of Soluna. Again, you can find them at soluna.io. So, John, why exactly are you guys choosing to mine Bitcoin with your renewable energy sources?

• 55:33Speaker 02

  Well, first of all, I get that question a lot, especially talking to renewable energy investors, why Bitcoin on a great energy site like this? And the thing that I always say is, well, you may not know this, but Bitcoin is a multi-billion dollar industry. In fact, every year, $5 billion of revenue is generated from mining that currency alone, and they only represent about 50% of the whole market. And on top of that, if you look at the ecosystem around that, billions of dollars is generated in profit through the sale of ancillary and supporting technologies to the industry. So it's a real ecosystem that just so happens to need unlimited and low-cost energy, and that energy should be renewable. So that's one way I answer the question.

• 56:17Speaker 02

  The second way I answer the question is I get them to think about, think differently about a typical renewable energy project. Most renewable energy projects, you have to find a great site, which in our case, we just so happen to have, then you have to connect that resource to the grid and find someone to buy that energy. So we're talking about 900 megawatts of power. You can't just put 900 megawatts of power to the grid. But let's say you did, in the traditional sense, governments would pay you very large feed-in tariffs, the rate that they pay you for putting that energy online, or support you with a number of subsidies, for example. Well, that's kind of come out of favor in the world right now, generally because governments are somewhat bankrupt, if you will, and so they can't support that.

• 57:02Speaker 02

  And that's put a huge depression on the profitability of a traditional renewable energy project. What we're saying is, what if you could combine everything you normally do? So you can build an energy site, put that to the grid, sell it through a host of different commercial off-takers that would buy the energy, but also combine it with a co-located, vertically-integrated computing center that would also generate revenue. What that does for you is, number one, you can start generating revenue from day one, so you don't have to wait until you find that grid off-taker, if you will. But then you can use the grid to sort of offset the volatility of cryptocurrency. The net result is you have a much more successful, potentially way more profitable, energy infrastructure project.

• 57:46Speaker 02

  So those two answers together kind of form the basis for Soluna's business model and also drives the opportunity to build something pretty unique in the whole blockchain ecosystem space.

• 57:58Speaker 00

  Got it. No, it makes complete sense. Thank you so much. And again, guys, you can check them out at saluna.io. Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.